USAA's Greg Schwartz Keeps IT's Focus On The Customer Experience

At USAA, CIO Greg Schwartz leads an IT organization whose mission is to innovate on behalf of its active and retired military member customers.

The banking business at USAA is relatively young compared with other prominent institutions. Yet since USAA Bank (San Antonio, Texas; $51 billion in assets) was founded in 1983, it has become an industry leader in technology innovation, and also has become the gold standard for customer experience and service. For example, USAA ranked No. 1 for banking, credit cards and insurance services in Forrester Research’s 2013 Customer Experience Index.

The imperative to provide a consistently great experience to its active and retired military members drives everything USAA’s 2,500-employee IT organization does, according to Greg Schwartz, CIO and senior VP. “Our responsibility is to innovate on behalf of our membership,” he says. “We’re all working together with the same goal: make USAA the absolute best experience that we can for our members.”

Adds Schwartz (who was named CIO in 2004 and is the first financial services CIO to be honored as an Elite 8 executive in both the banking and insurance industries), “Everything we do here begins and ends with our members. The customer experience matters.”

Since USAA Bank is a virtual institution with no branches, that experience has to be provided through interaction with the company’s member service representatives, as well as the online and mobile channels. However, what distinguishes USAA from other diversified financial services firms is that those channels are not distinct for banking or insurance. “We believe we have one customer at USAA, whether insurance, banking, or whatever product,” explains Schwartz. Account pages at usaa.com show all the products members have with the company — they aren’t routed to a banking or insurance submenu. ”That’s what we mean by customer experience: How would you want to interact with USAA, not the way a specific line of business might want you to? We’re organized around process, not around lines of business.”

Supporting The ‘One Company’ Experience

Under Schwartz’s leadership, USAA has created a common infrastructure that services its different businesses and runs a mix of internally developed and packaged banking applications, which are integrated to provide the “one company” experience. “One of our core competencies is integration,” Schwartz notes.

With this foundation, USAA is able to embrace innovation in its products, services and channels, according to Schwartz. Recently, much of that innovation has involved the mobile channel, which USAA has led as a pioneer of game-changing services such as mobile remote deposit capture and speech capabilities. But even a forward-looking organization like USAA was surprised at how quickly its members embraced mobile banking, Schwartz says, while acknowledging its benefits for the very mobile military population. “In a little under five years, our mobile traffic has surpassed our dot-com traffic. It is our No. 1 channel of choice for our banking customers.”

USAA’s pioneering approach to mobile comes from a culture where innovation is a shared value and is incorporated into the organization — starting at the top, Schwartz emphasizes. “We have a CEO [Joe Robles] who reminds us that innovation is part of our job,” he says.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

One of the things I discussed with Greg is the impressive bench strength they have on the management team at USAA. We often hear about team, collaboration, etc., but they have managed to have all these talented, creative people work effectively together -- doesn't seem to be a battle of egos.

I remember visiting with USAA's CIO more than a decade ago and even back then, the company had figured out how to provide an integrated customer experience to its customers. I remember we were shocked that customers could see all of their banking and insurance products in one place. They've been doing this very well for a very long time.

All these comments are on target -- the culture at USAA definitely sets it apart from so many other financial services companies.Not to take anything away from USAA, but I do think the company has one advantage to most other large companies do not have -- a relatively homogenous customer base (active and retired military). Obviously there is a lot of demographic, ethnic & other diversity within that constituency, but at the same time there are consistent needs, expectations, values -- and values that USAA shares. But that doesn't mean that USAA's achievements can't be replicated at other companies, because it all comes down to knowing your customer, anticipating and responding to needs & doing so with outstanding service and a willingness to be on the leading of technology to do so.

A lack of integration between business lines is definitely a culture issue, IMO. Institutional inertia (doing things the same way the company has always done them) is a hard thing to change.

The technology is available to integrate customer data from even the oldest legacy systems. However, you still see many insurers and other financial institutions with fragmented customer facing setups -- separate websites, call centers and often separate advisors for products.

As you noted Schwartz is the first CIO to be honored by both I&T and BS&T, and I think that speaks to the tight integration between the businesses within USAA. Talk to anyone at the company and you'll see how customer insight is passed from insurance to banking and vice versa, allowing the company to create an overall customer experience that is second to none in the industry. Meanwhile, you still have some multiline insurance companies that can't get life and auto premiums, for example, on the same bill... is this a technology problem or a culture problem?